In today’s Pope Center Clarion Call, I comment on the recent paper by Professor Vance Fried, “Federal Higher Education Policy and the Profitable Nonprofits.” His argument is that nonprofit colleges act like profit-making enterprises, but they simply spend their excess revenues in ways that keep the people in and around them happy — the faculty and administrators primarily. That leads to needlessly high costs and inefficient use of resources. Market competition usually squeezes out inefficiency and excess profits, but the market for higher education is not very competitive due to barriers to entry and government subsidies.
In today’s Pope Center piece, Jenna Ashley Robinson continues examining the case that higher education is a bubble that may burst or at least deflate. Among other evidence she presents, long-term average earnings for individuals with BA degrees have not risen much and the the last few years have dipped. Also, degree holders seem to be learning less, as shown by the National Assessment of Adult Literacy.
Yes, on average, those with college degrees continue to earn more than those without them, but not everyone is average. A large number of marginal students are lured into college, spend much time and money there, but even if they get the degree will find employment in jobs that high school grads can do.
Daniel B. Smith explores this question in New York magazine in a sobering, clear-eyed look at the problems with going to college, “The University Has No Clothes.” He interviews James Altucher, author of “8 Alternatives to Going to College” and Peter Thiel, who is offering $100,000 to 20 young entrepreneurs to drop out of college and start businesses.
Smith consults the experts to learn their attitudes on college. The authors of Higher Education?, Andrew Hacker and Claudia Dreifus, characterize college as a luxury good. Stephen Rose, author of Rebound, maintains it is an investment. And Thiel likens the college degree to “an insurance policy against falling out of the middle class.”
He sums up higher education’s paradoxical moment:
As Thiel and Altucher surely understand well, now is precisely the moment, with all its uncertainty and anxiety and instability, when systems as stalwart as college seem most in need of reconfiguration. But it is also the time—with all that uncertainty and anxiety and instability—when the millions reliant on a system as stalwart as college are least eager to do any real reconfiguring.
It’s good to see a “sexy” publication like New York paying attention to this. The “higher education bubble” conversation has so far been mainly restricted to speculative articles read by intellectuals and has not yet reached the kitchen tables of American families. It looks as if that will soon change.
In today’s Pope Center piece, Jay Schalin writes about this year’s budget battle in North Carolina, in which the UNC system, despite all its friends in high places, taken a hit. Evidently, the old “spend more on higher ed and the state will prosper” argument has finally run out of steam.
In today’s Pope Center piece, Jay Schalin looks at the recent statement by the UNC system that appears to overstate the amount of teaching that professors actually do. He concludes that profs do considerably less and recommends that, as higher education (and much else in America) enters a period of austerity, colleges and universities will need to increase faculty teaching to lower costs.
That is the finding of a recent study done by Robert Martin and Andrew Gillen for the Center for College Affordability and Productivity and I write about it in this week’s Pope Center Clarion Call.
In my view, Martin and Gillen have torpedoed and sunk the badly damaged ship that was the “colleges can’t help their increasing costs so the government must subsidize students” argument.
Today both Peter Wood and Jason Fertig observed that Paul Krugman, whom Peter calls one of the “stalwarts of the left,” has gone on record to doubt the value of the college degree as the best path to prosperity for the majority of Americans.
Krugman began his recent op-ed:
It is a truth universally acknowledged that education is the key to economic success. Everyone knows that the jobs of the future will require ever higher levels of skill. That’s why, in an appearance Friday with former Florida Gov. Jeb Bush, President Obama declared that “If we want more good news on the jobs front then we’ve got to make more investments in education.”
But what everyone knows is wrong.
Krugman goes on to argue that more education does not necessarily lead to a stronger national economy, an argument that NAS and our friends at the Pope Center and the Center for College Affordability and Productivity have been making for some time.
Peter and Jason note that when someone as prominently on the left as Krugman acknowledges that the value of the college degree is weaker than it’s cracked up to be, we must be nearing some broader consensus about higher education’s worth.
In this week’s Pope Center Clarion Call, Jay Schalin writes about the need to pare down North Carolina’s spending on higher education in the face of a large budget deficit. He suggests six criteria for legislators to keep in mind. They are equally applicable in every other state.
Professor Mark Shapiro, a.k.a. The Irascible Professor, writes here about the fact that the California State University system continues to waste lots of money on raises for administrators, redundant offices, and consulting contracts, even as the state struggles to stave off bankruptcy.
Judging from some unpleasant comments Shapiro has made in the past about NAS, I’d have to place him toward the left side of the political spectrum. It’s interesting to know that people who are generally not disposed to complain about government waste do so when that waste is harmful to their own interests. By all means, professor, let’s rescind those administrative raises and unnecessary spending you identify. How about ditching all the Offices of Diversity and Inclusion and other sinecures, too?
In this extensive Inside Higher Ed piece, Rich Vedder responds to criticism by Anthony Carnevale, who takes issue with Vedder’s argument that many college graduates derive no financial benefit from their degrees.
I will just add a bit regarding the notion that there is a “college wage premium.” Carnevale (and other higher ed establishment defenders) keep asserting that employers “pay a premium for college education.” Not true. The guy with a college degree working at Starbucks is not paid more than the barista next to him who dropped out of high school. The college (or even law school) graduate who ushers you to a seat in a theater is not paid more than the usher in the next aisle who only finished high school.
Yes, on average people who have college credentials have higher earnings than people who don’t, but that should not lead to the conclusion that a college degree is so valuable that employers pay extra to those who possess one.
The establishment’s defense line on the alleged college premium was always weak, but the revelations in Arum and Roksa’s new book Academically Adrift really ought to cause it to retreat. If, as they find, many college students gain almost nothing from their coursework, why should anyone believe that they are nevertheless significantly more valuable to employers than those who did not go to college? Many schools are eager to recruit and retain students who have very poor academic preparation and scant interest in rigorous work. They string them along with easy courses where no one ever fails. These poor kids are not adding to their human capital; they’re just adding to their indebtedness. We should stop luring them into college with talk about the wage premium they’ll allegedly enjoy.
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